By Ketan Sonalkar
October of 2022 saw the benchmark indices Nifty 50 rise 5.37% and Nifty Bank 6.93%. Both of these indices are now trading close to their all-time highs. With such massive gains, it was not surprising that mutual fund managers chose to add up on banking stocks with potential returns. Some other sectors that saw buying were logistics, auto ancillary and speciality chemicals.
Samvardhana Motherson - Gets boost from revival in the auto sector
Samvardhana Motherson, formerly known as Motherson Sumi, is an auto component manufacturer which supplies the global PV (passenger vehicle) industry with wiring harnesses, vision systems (mirrors) and plastic body parts.
Q2FY23 results were encouraging for the company with it registering its highest-ever quarterly revenues at Rs 18,354.8 crore. Considering the expanding market for EV components, the company has also taken steps to expand its production capacity.
In September 2022, it acquired 100% stakes in Japanese company Ichikoh Industries at an enterprise value of Japanese Yen (JPY) 5.2 billion. The transaction includes Ichikoh’s mirror business (development and manufacturing of automotive mirrors and associated products) in Japan and China, catering largely to Japanese original equipment manufacturers (OEMs)
Fund managers who bought shares of Samvardhana Motherson
Fund managers who added shares of Samvardhana Motherson to their portfolios include Hiten Shah forKotak Equity Arbitrage Fund Growth, Sailesh Raj Bhan and Kinjal Desai for Nippon India Multi Cap Fund - Growth, Kinjal Desai and Ashutosh Bhargava for Nippon India Tax Saver (ELSS) Fund - Growth, and Sailesh Raj Bhan and Kinjal Desai for Nippon India Large Cap Fund - Growth.
Zee Entertainment - Growing market share and impending merger pique interest
Zee Entertainment is one of the largest listed media companies in India. It owns and operates 49 TV channels across 11 languages and also an OTT app Zee5.
In Q2FY23, the TV network’s viewership share was 16.4%, improving from 16.1% in Q1FY23, with a revised content strategy driving viewership in Hindi and Tamil. It also continues to gain viewership in Marathi among regional channels.
Future growth triggers include higher adoption of OTT subscriptions under Zee5 and unlocking synergies with the proposed merger with Sony, for which the company has received conditional approval from the CCI. It expects the merger to be completed by Q4FY23.
Fund managers who bought shares of Zee Entertainment
Additional shares of Zee Entertainment were added by Sankaran Naren and Dharmesh Kakkad to ICICI Prudential Value Discovery Fund Growth, Mahesh Patil toAditya Birla Sun Life Frontline Equity Fund Growth, Sankaran Naren and Sharmila D’mello toICICI Prudential Focused Equity Fund Growth and Neelesh Surana and Ankit Jain to Mirae Asset Emerging Bluechip Fund Growth.
BHEL - Strength in order visibility over the next few years
BHEL, a public sector entity, is India’s largest engineering company and dominates the supply of equipment for power plants in India. The company’s products include gas turbines, generators, thermal sets, diesel shunters and other power plant equipment.
Its order inflow in Q2FY23 was robust at Rs 12,000 crore, with the announcement of the 2x660 NTPC Talcher win. Management expects revival of the thermal order pipeline with ~5 GW of expected annual order for the next five years. Order intake for the industrial segment was up 78% YoY to Rs 22,800 crore in Q2FY23, which included supply of locomotives and propulsion equipment in the transportation segment and transmission equipment among others.
Fund managers who bought shares of BHEL
Fund managers who added shares of BHEL to their schemes include Vinay Sharma and Kinjal Desai for Nippon India Focused Equity Fund - Growth, Krishan Kumar Daga and Arun Agarwal for HDFC Arbitrage Fund Wholesale Plan Growth, Atul Bhole and Laukik Bagwe for DSP Dynamic Asset Allocation Fund Regular Growth, and Venugopla Manghat and Praveen Ayathan for L&T Arbitrage Opportunities Fund Regular Growth.
IndusInd Bank - Improving performance this quarter aided by continual expansion
IndusInd Bank is part of the Hinduja Group. Its consumer finance division provides loans for vehicles, property and so on, while its corporate banking division offers a wide range of products to small and medium enterprises (SMEs) and large firms.
The bank posted a good set of numbers in Q2FY23. Its quarterly revenues were the highest ever at Rs 10,719.2 crore and net profits rose to Rs 1805.2 crore, a YoY increase of 57.4%. Gross NPAs also reduced significantly to 2.11% in Q2FY23.
IndusInd Bank continues to invest in physical and digital resources and has added 55 branches, 2,700 employees in banking and 3,650 employees in vehicles and microfinance and distribution this year.
Fund managers who bought shares of IndusInd Bank
Addition of shares of IndusInd Bank was done by Hiten Shah for Kotak Equity Arbitrage Fund Growth, Priya Ranjan and Rahul Baijal for HDFC Top 100 Fund Growth, Priya Ranjan and Anil Bamnboli for HDFC Balanced Advantage Fund Growth, and Atul Penkar and Dhaval Gala for Aditya Birla Sun Life Tax Relief.
Canara Bank - Part of the PSU banks revival and growth story
Canara Bank is the third largest public sector bank in India. Among PSU banks, it has had a stellar run on the stock exchanges with its price nearly doubling in the past five months from the lows it made in June 2022.
Like many other PSU banks, Canara Bank also saw a significant improvement in its business over the past few quarters. In the latest quarter, Q2FY23, its revenues grew to an all-time quarterly high of Rs 27,358 crore, a YoY increase of 14.5%. Its net profit was also the highest in the past 10 quarters at Rs 2,705.6 crore, a YoY increase of 151.8%. Meanwhile, gross NPAs fell to 2.19% in Q2FY23 from 3.21% in Q2FY22.
Fund managers who bought shares of Canara Bank
Buying interest for Canara Bank came from Aniruddha Naha and Vivek Sharma forPGIM India Midcap Opportunities Fund Regular Growth, Sailesh Raj Bhan and Kinjal Desai Nippon India Multi Cap Fund - Growth, Mitul Kalawadia and Anand SharmaICICI Prudential PSU Equity Fund Regular Growth, and Vinay Sharma and Kinjal Desai Nippon India Banking & Financial Services Fund Growth.
RBL Bank - Bouncing back after a few lackluster quarters
RBL Bank, a private sector bank with a nationwide network of 435 branches, offers various services, including corporate and institutional banking, commercial banking, retail banking, agricultural development banking and financial market access.
It reported a 5.5x YoY jump in net profit to Rs 200 crore in Q2FY23, aided by a 63% decline in provisions. There was a pick-up in loan growth, up 12% YoY and 4% QoQ to Rs 62,900 crore. Within the retail lending segment, housing loans improved 35% QoQ and the MFI portfolio rose 22%. Credit cards grew at a steady pace of 4% QoQ. The share of credit cards stands at 23% of total loans.
RBL Bank has plans to launch its loan products for two-wheelers, used cars and Gold in Q3FY23. Overall, the bank is targeting a loan growth of 15% in FY23.
Fund managers who bought shares of RBL Bank
Fund managers who added shares of RBL include Kinjal Desai and Ashutosh Bhargava toNippon India Small Cap Fund - Growth, Kinjal Desai and Anand Gupta to Nippon India Arbitrage Fund Growth, Sonam Udasi and Abhinav Sharma to Tata Flexi Cap Fund Regular Growth, and Sanjeev Sharma and Vasav Sahgal to Quant Small Cap Fund Growth.
Delhivery - Path to profitability on the horizon
Delhivery, the largest fully-integrated logistics player in India by revenues, provides logistics services, including express parcel, e-commerce delivery and heavy goods delivery. Its network includes 122 gateways, 21 automated sort centres and 93 fulfilment centres.
In Q2FY23, its revenue from services was Rs 1,796 crore, up 22% YoY from Rs 1,474 in Q2FY22. Loss after tax in the same period narrowed down to Rs 254 crore from Rs 643 crore in Q2FY22. Overall, the company’s adjusted EBITDA loss reduced to Rs 125 crore in Q2FY23 on a sequential basis from Rs 217 crore in Q1FY23. As chances of profitability improve, there is growing interest in the stock from domestic institutions.
Fund managers who bought shares of Delhivery
Shares of Delhivery were added to respective portfolios by R Srinivasan and Mohit Jain for SBI Flexicap Fund Regular Growth, Priya Ranjan and Roshi Jain for HDFC Flexi Cap Fund Growth as well asHDFC Focused 30 Fund Growth, and Harish Bihani and Sharmila D’mello for ICICI Prudential Transportation and Logistics Fund Regular Growth.
Biocon - Acquisitions and international deals could improve company’s health
Biocon is a biopharmaceutical company. It develops therapy for chronic diseases such as autoimmune disease, diabetes and cancer. It has developed and introduced novel biologics, biosimilars, differentiated small molecules and affordable recombinant human insulin and analogues into the market.
Biocon via its subsidiary, Biocon Biologics, will acquire the global biosimilars portfolio of Viatris. It expects the deal with Viatris to close in the second half of the current financial year. Through this deal, Biocon will gain Viatris’ global biosimilars business, whose revenues are estimated to be $1 billion next year, along with its portfolio of in-licensed biosimilar assets. This is an important deal for Biocon because it gives the Bengaluru-based company access to Semglee, an insulin brand.
The company also announced signing a strategic out-licensing agreement with Japanese pharmaceutical company Yoshindo Inc. for commercialising two of its pipeline biosimilar assets in the Japanese market. The company is in talks with Japanese regulators for data on two clinical assets and looks to commercialise the same across different markets.
Fund managers who bought shares of Biocon
Buying interest in Biocon was seen from Hiten Shah for Kotak Equity Arbitrage Fund Growth, Neelesh Surana for Mirae Asset Tax Saver Fund -Regular Plan-Growth, Sailesh Jain for Tata Arbitrage Fund Regular Growth, and Neeraj Kumar and Arun R for SBI Arbitrage Opportunities Fund Regular Growth.
Prestige Estates - Expanding footprint across the country
Prestige Estates is India’s largest developer in terms of booking value for FY22. Most of their projects are executed in Bengaluru and Hyderabad. The company has entered into Mumbai and NCR as well and is targeting aggressive growth in these geographies.
Prestige Estates has reported pre-sales in value terms at Rs 3,511 crore in Q2FY23, up 66% YoY. In volume terms, bookings increased to 4.55 million square feet (msf). Collections rose 68% YoY to Rs 2,603 crore in Q2FY23 and it launched five projects spanning 7.39 msf this quarter.
Fund managers who bought shares of Prestige Estates
Additions to respective schemes were made by Neelesh Surana and Ankit Jain to Mirae Asset Emerging Bluechip Fund Growth, Ankit Jain to Mirae Asset Midcap Fund Regular Growth, Neelesh Surana to Mirae Asset Tax Saver Fund -Regular Plan-Growth and Roshi Jain and Priya Ranjan toHDFC TaxSaver Growth.
Anupam Rasayan - Chemical company benefiting from China+1 factor
Anupam Rasayan is engaged in custom synthesis and manufacture of life science-related speciality chemicals in India.
In Q2FY23, its operating revenue was Rs 31.07 crore, a YoY growth of 25%, while EBITDA was Rs 89.8 crore, a YoY growth of 29%. It also raised around Rs 500 crore through Qualified Institutional Placement (QIP) for growth capex in Q2FY23. Proceeds will be utilised for building multipurpose plants in existing units at Sachin and Jhagadia. A cash balance of Rs 192.1 crore in H1FY23 would be sufficient for the planned capex.
Fund managers who bought shares of Anupam Rasayan
Fund managers who added shares of Anupam Rasayan include Sanjeev Sharma and Vasav Sahgalfor Quant Active Fund Growth, Mahesh Patil and Dhaval Shah for Aditya Birla Sun Life Multi-Cap Fund Regular Growth, Satyabrata Mohanty for Aditya Birla Sun Life Equity Advantage Fund Growth, and Sandeep Manam and Akhil Kalluri for Franklin India Smaller Companies Fund Growth.